Trump pushes separate trade deal with Canada

WASHINGTON - President Donald Trump is "seriously contemplating" making separate trade deals with Canada and Mexico, in place of the two-decade-old North American Free Trade Agreement, and has broached the idea with Ottawa, a White House official said Tuesday.

"He prefers bilateral negotiations and he is looking at two much different countries," Trump economic adviser Larry Kudlow said on Fox News.

Kudlow said he is awaiting a reaction from top Canadian officials to whom he relayed the idea on Monday.

"I'm waiting to hear what their reaction is going to be frankly. I spoke yesterday to one of their top people, right next to the prime minister. He will probably get back to me sometime today," Kudlow said, expressing hope the response will come "as soon as possible and move the whole process forward."

Kudlow noted that the talks to revamp the North American Free Trade agreement have "dragged on" so separate deals "might be able to happen more rapidly." Trump "is seriously contemplating a shift in the NAFTA negotiations ... (and) he asked me to convey this," he said, adding that the president "believed bilateral is always better. He hates large treaties." Trump on Friday first floated the idea of having individual agreements to replace NAFTA, which he again called "a terrible deal."

Trump at one point threatened to pull out of the three-nation pact. Talks to revise and modernize the deal have been underway since late 2017, but became hung up on US demands to increase American content in duty-free NAFTA autos, as well as a five-year sunset clause.

Negotiations are now in suspense due to the coming elections in Mexico and the United States.

"The important thought is he may be moving quickly towards these bilateral discussions instead of as a whole," Kudlow said, but noted it is not clear how soon that would happen.

However, Kudlow said Trump "will not withdraw from NAFTA. He will try a different approach."

The NAFTA talks are just one facet of Trump's confrontational, multi-front trade policy, which includes imposing steep tariffs on steel and aluminum coming from chief US allies -- Canada, Mexico and the European Union -- which has prompted sharp retaliation.